U.S. Treasury cash trading resumed after the holiday, with longer-dated bonds gaining as turmoil surrounding Nvidia deepened investor doubts about the AI trade and spurred safe-haven demand. According to Sina Finance, the 30-year Treasury yield fell 2 basis points to 5.34% ahead of a Thursday auction, while the 10-year yield briefly declined before holding at 4.99%. Cash Treasuries did not trade Wednesday because of the Veterans Day holiday.

Reports that Nvidia’s board was considering removing CEO Jensen Huang following allegations of multiple extramarital affairs also weighed on sentiment. “All this news about Huang has further deepened market doubts about the AI narrative and prompted modest safe-haven demand for U.S. Treasuries,” said Carol Kong, a strategist at Commonwealth Bank of Australia (CBA). She said market participants were closely watching the matter given Nvidia’s importance to the AI investment boom and the global economy.

Demand for other government bonds was also strong in Asian markets, with yields on Australian and New Zealand government bonds falling by at least 1 basis point.

Short-dated Treasuries edged lower as traders continued to bet on further Federal Reserve rate hikes, flattening the yield curve. The 2-year Treasury yield rose 3 basis points to 4.77%, and the 5-year yield increased 1 basis point to 4.83%.

Swap markets showed traders expected a 25-basis-point rate hike at the Fed’s December meeting after a strong rise in the key consumer price index in October. The data prompted Fed officials to leave the door open to larger hikes in the coming months. Fed Governor Christopher Waller said a 0.5-percentage-point increase may be needed in December.

“Higher U.S. short-term bond yields this morning may reflect continued hawkish repricing following the higher U.S. CPI and some fairly direct, hawkish remarks from Fed officials since then,” said Andrew Ticehurst, a senior rates strategist at Nomura in Sydney. He said market expectations for a 30-basis-point hike at the Fed’s next meeting were already high, and that markets were considering the risk of a 50-basis-point hike in December.